The first response we usually get (or sense) when explaining the concepts behind financial independence – and in particular frugality – are that we must be depriving ourselves of “the lives we deserve” by being in a higher income bracket yet choosing to spend so little money. Instead of waxing poetic about the philosophy of simple living, let’s start with some examples of what we consider low-hanging fruit in the hierarchy of unnecessary spending.
“I love eating out, so I’m happy regularly spending money in restaurants.”
Well…we love restaurants too. Despite our obsession with spreadsheets, interest calculators, and other financial wizardry, we’re not totally soulless left-brain robots. To the contrary: I spent many of my formative years cooking in the restaurant industry, from fast food to fine dining, and briefly pursued a full-speed-ahead career move to professional cooking after finishing my undergrad degree. Food is one of the simple pleasures in life that we hold dear, and probably one of the biggest reasons I don’t climb harder!
Eating Out More Than Eating In?
When we lived in Houston, our single biggest factor in lifestyle inflation was the amount of money we were spending outside of our grocery bill (which was also inflated). A dinner out for two with a couple of drinks starts around $40 and can quickly balloon to over $100 depending on the restaurant and/or your degree of alcoholism. To eat out only two nights per week is going to cost at least $320/month with the $40 case above, already approaching our monthly total food budget today!
Looking back at our older spending tracking sheets of yesteryear, it was not at all uncommon to see “non-grocery” food spending in the $500/month range, which I’d imagine is not at all uncommon for a middle-class family.
Getting back to the quote above. You like eating in restaurants, and we do too! But by focusing more attention on cooking and eating at home, there comes a heightened sense of joy and beauty in the food created in one’s own kitchen. Sure, not every Tuesday night dinner is going to earn a Michelin Star, but as with anything else, practice makes…well…better.
The journey may begin with online recipes, but patterns will soon begin to emerge: common methods, ingredient parings, simplicity of game-changing sauces. In time, mythical and mysterious cuisine becomes sensible and easily executable. Plus, these guys just make it seem so fun right?
Using Your Kitchen
One of the aspects of financial independence that I adore is the acquisition of new skills. If unwilling to pay, one must learn to do. Mrs. CC has been honing her skills in the baking department, complete with fresh boules on the weekends and various other pastries.
Cooking takes time and effort, but with that effort comes the simple satisfaction of creating, and then the enjoyment of the fruits of labor. Plus Mrs. CC makes damn good bread! I’d take one of these puppies over the mediocre $4 loaves at the store any day.
Taking Control of Your Health
Wish you had a better handle on your weight? Good luck with that if not cooking your own food! That entrée du jour may have three heart-healthy designators (gluten free, low in fat, farm-raised, etc) to warm the heart, but the truth remains that American restaurant portions and calorie counts are well in excess of what is required for even the most active among us.
When the CC Family decided to almost entirely eradicate non-grocery spending from the budget, I was finally able to take the helm on my weight, noticing a level of control never experienced before. The captain of that metaphorical ship had been at minimum “a little drunk”, weaving about in the bay, hitting a few buoys here and there.
With full control of my diet, I now have the power to tweak subtle knobs and get quick results. Need to lose five pounds for a next-level climbing project? No problem, just give me a month. Relying on someone else to cook your food not only levies a hefty tax on your wallet, but applies yet another tax to your waistline!
The Value Proposition
When we do go out now, the experience is infinitely more meaningful and enjoyable. We’ve grown so accustomed to cooking our own meals and cleaning our own dishes, to have someone do that for us is semi-magical! We make a point of going out for a nice dinner several times a year and more modest restaurants once every other month or so. When we do go out, I gladly sign the bill, add a fat tip, and leave satisfied. If we had that sort of experience several times a month we wouldn’t get nearly as much value out of the money spent.
Your Food Money Making Money
Let’s do some math (with online calculators)! For the sake of example, let’s say I spend $500/month eating food “out”, which includes restaurants, pre-made food at the grocery store, fast-food, etc — anything I don’t cook. Now imagine if I cut my monthly spending here to $200 (which we’d say is still quite hefty, but you do you), and are now saving $300/month.
Now, importantly, assuming I don’t go buy a new vanity plate or too many Nicholas Cage pillowcases with my savings and instead invest that new surplus where it generates (on average) a 7% year-over-year return, in 30 years my savings from this minor adjustment alone will have generated in excess of $342,000!
In addition, my yearly expenses are cut by $3,600, which is substantial in determining what I need to live off of on the 4% Rule. Isn’t this fun?! Want to use your own numbers? Check out the CC Family favorite compound interest calculator.
Notice that I didn’t cut “eating out” spending to zero? Again, we’re not about depriving ourselves here at the CC Household, but we are 100% about value spending. My sister, a stay-at-home mother of two, likes to get the occasional dinner out with her girlfriends to keep her sanity and see the world outside her living room. That sounds like a good value proposition to me!
Analyze the ways you are spending money on food. Is the value of your precious post-tax dollar being maximized? Don’t take my word for it; ask the guy who would have loved for you to open up your wallet in his restaurant:
What do you think is the biggest barrier to cooking more of your own food? Time? Lack of skills? Intense fear of knives?
Winter is coming and that oven is going to feel mighty nice!